EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
 CSIH 13
OPINION OF LADY PATON
in the cause
MATTHEW PURDON HENDERSON
(Liquidator of Letham Grange Development Company Limited)
Pursuer and Reclaimer;
(FIRST) FOXWORTH INVESTMENTS LIMITED
(SECOND) 3052775 NOVA SCOTIA LIMITED
Defenders and Respondents:
Pursuer and Reclaimer: Lord Davidson of Glen Clova QC, D Thomson;
Burness Paull & Williamson
First and Second Defenders and Respondents: Sandison QC; Halliday Campbell
1 March 2013
 In this action, the liquidator of a company known as Letham Grange Development Company Limited (LGDC) seeks reduction of a standard security dated 6 January 2003 granted over LGDC's heritable property. A proof before answer took place in 2010. The liquidator contends that one inference arising from the evidence was as follows.
 In 2001, LGDC was in financial difficulties. Mr Liu, a director with control of LGDC, arranged the sale of the company's principal asset, namely a country club (Letham Grange) extending to 283 acres and worth £1.8 million, at an undervalue of £248,100 to another company which he controlled, namely NSL. After the appointment of the liquidator to LGDC on 15 November 2002, Mr Liu arranged for the granting of a standard security dated 6 January 2003 by NSL over the country club, neither in good faith nor for value, in favour of a third company (Foxworth) which he controlled. Those transactions were carried out, it is said, with a view to placing the valuable heritable property beyond the reach of the liquidator, thus defeating the claims of LGDC's creditors.
 On 12 April 2011 the Lord Ordinary, having heard evidence and submissions, refused to grant the reduction sought, and assoilzied the defenders. The liquidator now reclaims.
 The liquidator's current action for reduction of the standard security is not the first action raised in connection with Letham Grange. There has been a protracted history of litigation dating back to 2003. In particular, on 11 April 2003, the liquidator raised an action seeking reduction of the 2001 disposition. On 9 December 2003, Lord Carloway granted summary decree. A reclaiming motion was marked and the pleadings were amended. The Inner House recalled the summary decree and remitted the action to the Outer House to proceed on the basis of the amended pleadings. On 21 April 2004 Lord Carloway again granted summary decree. A reclaiming motion was unsuccessful (2005 1 SC 325). However an appeal to the House of Lords was successful (2006 SC (HL) 85). The matter was remitted back to the Court of Session. At a proof before answer, the defenders failed to appear. Decree in absence was granted on 6 January 2009 (not 6 December 2009 as noted in paragraph  of the Lord Ordinary's opinion dated 12 April 2011).
 Later in 2009, the liquidator raised the present action seeking reduction of the 2003 standard security. Article 4 of Condescendence states inter alia:
"COND 4 [NSL's] title to grant any heritable security over the subjects has been reduced. The effect [of] the decree of reduction is qualified by the provisos to sections 242(4) and 243(5) of the 1986 Act. The decree is without prejudice to any right or interest acquired in good faith and for value. The [liquidator] challenges the deed purporting to create the standard security on two grounds:
1. [Its formal validity, a ground no longer insisted upon by the liquidator.]
2. In any event, as hereinafter condescended upon in Articles 6 and 7, the [liquidator] maintains that the rights of [Foxworth] under the standard security ... were not acquired in good faith, even if they were acquired for value (which is not known). He seeks reduction in terms of the second conclusion ..."
The second plea-in-law is as follows:
"2. [NSL] having no title to grant the standard security, and any right or interest that [Foxworth] may have under it not having been acquired in good faith and for value, decree of reduction should be granted as second concluded."
The standard security
 The standard security bearing the date 6 January 2003 granted by NSL in favour of Foxworth provides inter alia:
"We [NSL] ... hereby undertake to pay to [Foxworth] ... all sums due and that may become due by us to [Foxworth] in respect of a personal bond and debt agreement with interest from 25 January 2001 at 8.5 % per annum ...; For which we grant a standard security in favour of [Foxworth] over ALL and WHOLE the subjects known as Letham Grange ... [subject to certain standard conditions] ... Upon any of the above named defaults, [Foxworth] will immediately take possession of the collateral and become the rightful owner of the whole subjects ..."
The standard security was drafted by the company director in question, Mr Liu. It was signed in Taipei on 6 January 2003 by Miss Lee Fon Yi (see paragraphs  and  below). It was not presented to be registered in the Land Register until 20 June 2003.
The questions at
issue: whether transactions in good faith and for value
 Sections 242 and 243 of the Insolvency Act 1986 provide for the reduction of gratuitous alienations and unfair preferences, but with the following provisos:
Section 242(4): gratuitous alienations
"On a challenge being brought under subsection (1), the court shall grant reduction ...; but the court shall not grant such decree if the person seeking to uphold the alienation establishes - ...
(b) that the alienation was made for adequate consideration, ...
Provided that this subsection is without prejudice to any right or interest acquired in good faith and for value from or through the transferee in the alienation."
Section 243(5): unfair preferences
"On a challenge being brought under subsection (4) above, the court, if satisfied that the transaction is a transaction to which this section applies, shall grant decree of reduction ...
Provided that this subsection is without prejudice to any right or interest acquired in good faith and for value from or through the creditor in whose favour the preference was created."
 The 2001 disposition has already been reduced by decree in absence dated 6 January 2009. However it would be unrealistic to view the 2003 standard security in isolation. On the contrary, I consider it necessary to have regard to the whole picture, and therefore to take into account all the surrounding circumstances including the purchase of Letham Grange by LGDC in 1994, the sale of Letham Grange to NSL in 2001, and the circumstances surrounding the 2003 standard security.
 Thus the questions at issue in this case are whether the rights or interests acquired as a result of the 2001 disposition and the 2003 standard security were acquired in good faith and for value. In that context, the fact that Mr Liu was, at all relevant times, a director of LGDC, NSL, and Foxworth, with control of those companies, gives rise to an inference that each of these companies had knowledge of the circumstances and the affairs (including the financial affairs) of the other companies. I therefore agree with the Lord Ordinary's summation at paragraphs  and  to  of his opinion, where he states:
" In many cases, the critical question relevant to the issue of good faith is whether it can be shown that the third party acquiring some right or interest in the property did so with knowledge of the circumstances which (later) led to the reduction of the title of the person from whom he acquired such right or interest. If that were the main issue, then, subject to one point of law, it might be thought that there would be little difficulty in the present case. It is accepted that [LGDC], NSL and Foxworth all had at least one common director ... Mr Liu. He is the principal actor in the events with which this action is concerned ...
 I accept that the [liquidator] has made no averments instructing a case that Mr Liu was the directing mind of Foxworth or that he was the person at Foxworth responsible for making the relevant decisions in terms of which Foxworth acquired rights under the standard security. But the evidence adduced by the defenders themselves made it clear that this was Mr Liu's role in the company. In para.17 of his witness statement, Mr Liu described briefly the circumstances in which the standard security came about:
'In around 2003, I agreed with my wife and parents that [Foxworth], another of our family companies, would undertake some of the liability to repay them ... Eventually, when we decided that Foxworth would assume liability to repay money to my family, I decided that I would get a fresh standard security and personal bond drawn up. Foxworth assumed liability to pay £2,000,000 in total and the personal bond was for that sum ...'
In that passage Mr Liu referred to agreeing with his wife and parents that Foxworth would undertake the liability. In their evidence, his wife, his father and his mother each confirmed that they left the running of the family business interests, of which Foxworth was part, to him. It is clear, therefore, from this evidence that Mr Liu took all the material decisions on behalf of Foxworth and, specifically, took the decisions relating to the acquisition by Foxworth of rights under the standard security. In those circumstances I have no difficulty in finding that Mr Liu was, indeed, the directing mind of Foxworth; and, since the evidence was introduced by the defenders themselves and without objection, it is now too late for them to contend that the [liquidator] cannot rely upon it in support of his case on attribution of knowledge.
 I have no doubt that, in the present case, the knowledge of Mr Liu about the circumstances of the disposition to NSL can be attributed to Foxworth."
from 1994 to date
 I am indebted to the Lord Ordinary's opinion for much of the information contained in the following chronology. Occasional additions have been made from the productions and transcripts in the appendix, and from counsel's submissions. In my view, it is necessary to set out the chronology of events, as the significance of some of the actions and events depends upon their sequence and timing.
 In 1994, Mr Liu set up the company called Letham Grange Development Company Limited (LGDC). He was a director and the sole shareholder. LGDC was to acquire heritable property in Scotland, namely the country club extending to 283 acres comprising a hotel, two golf courses, and a curling rink ("Letham Grange"). The purchase price was to be £2.105 million. Mr Liu instructed Mr Gardner of MacRoberts. Mr Gardner received funds of £1.892 million from Sanwa Bank. His only knowledge of the source of the £1.892 million was Mr Liu's word, namely that it comprised a family loan. Mr Gardner also received the sum of £349,988, attributed to Mr Liu's father, Jieh Jow Liu. On 7 November 1994 Mr Gardner sent Mr Liu a fax asking him:
"... for clarification as to exactly who is providing the loans to [LGDC] ... The Bank require to know whether the funds which I am holding ... are coming from Directors or non Directors or both. Can you therefore please send me a fax listing exactly who is providing these funds ..."
 The purchase of Letham Grange duly took place in November 1994 at an adjusted price of £2.073 million [Messrs Thorntons' letter dated 14 November 1994, appendix volume 1 tab 25].
 By fax to Mr Liu dated 22 February 1995, Mr Gardner again requested details of the loans to LGDC:
"... Perhaps you could confirm to me the terms upon which the money has been lent, as to interest and repayment and by whom it has been lent (that is, is it solely attributable to you or amongst you and members of your family). Please let me know whether there are any written agreements in respect of the loans ..."
 In a responding fax to Mr Gardner dated 23 February 1995, Mr Liu referred to eight lenders, as follows:
"... The split of the [shareholders] loans are to be in the same 15% for males and 10% for females ... Therefore Jieh-Jow Liou [sic], Peter Liu, John Liu, and Terry Oyama have each lent the company 15% each of the shareholders loan. Shiau Chang-tzu Liou [sic], Jean Liu, Linda Liu and Maria Liu have each lent the company 10% each of the shareholders loan. Figure out the mathematics ..."
 Mr Gardner's continuing uncertainty about the loans was reflected in his letter dated 16 March 1995 to Touche Ross:
"... I think that the loan which has been made would ... be allocated amongst the shareholders in the manner which Peter Liu has indicated will be the case for all the share and loan capital of the company:-
Peter T Liu 15%
Liou-Jeih Jow 15%
John C Liu 15%
Tetsusei Oyama 15%
Liou Shiau Cheng-Tzu 10%
Linda L Liu 10%
Jean C Liu 10%
Maria I Liu 10%
Whereas it is clear that the money has been lent, there is no documentation to evidence exactly to whom the company owes money or upon what terms as to repayment or interest. I suspect that until the equity and debt structure has been more formalised, the loans are probably on demand ..."
 Several years later, LGDC was experiencing financial difficulties. In January 2001, Mr Liu set up a company (NSL) for the sole purpose of purchasing Letham Grange from LGDC. The value of Letham Grange as a going concern at that time was about £1.8 million. Nevertheless the purchase price envisaged by Mr Liu was £248,100, for the reasons he gave in his evidence (see paragraph  below). On 8 February 2001, Mr Liu received a fax dated 7 February 2001 from Mr Gardner of MacRoberts. In that fax, Mr Gardner warned Mr Liu (addressing him as Dong Guang Liu) that:
"... If the transfer of Letham Grange is at a figure under its true value, then such a transfer could be attacked in the future by any liquidator of Letham Grange ... In the event of the transfer of the land being at an undervalue then it is possible ... the transfer itself could be rendered void."
 On 12 February 2001, LGDC (controlled by Mr Liu) granted a disposition of Letham Grange to NSL (controlled by Mr Liu) as trustee for an undisclosed beneficiary. The consideration recorded in the disposition was £248,100. The identity of the undisclosed beneficiary was not revealed to Mr Gardner in 2001, nor during the proof in 2010, nor (despite a specific question from the bench) during the reclaiming motion in 2012.
 Throughout the conveyancing transaction, Mr Gardner questioned the reasons for the sale, and the low price. Mr Liu gave the following explanations - significantly, not to Mr Gardner in 1994-95 or 2001-03 (see paragraph  below) - but only after the liquidator's appointment, during the sheriff court liquidation proceedings and the proof in the present action. On those later occasions, Mr Liu stated that £200,000 of the £1.892 million received from Sanwa Bank in 1994 was guaranteed by the Coquihalla Development Company ("Coquihalla") - a company controlled by the Liu family [Mr Liu's witness statement appendix volume 4 tab 140 paragraph 5]. Mr Liu maintained that in about 2000 Sanwa had started asking that the sum guaranteed by Coquihalla be repaid. LGDC had therefore to find funds (including interest) amounting in total to about £248,000 to send to Sanwa Bank. Mr Liu told the court that LGDC did not have such funds; nor could LGDC borrow that sum from a lender because at that stage LGDC was "between accountants" and thus there were no company accountants who could properly record the loan. The solution was, Mr Liu maintained, to sell the whole heritable property - hotel, golf courses, curling rink, and land. Further, as only a certain amount of cash was required (the £248,000 guaranteed by Coquihalla), the sale price need only be £248,100. Mr Liu confirmed that he had instructed Mr Gardner to prepare missives of sale, and to draft a disposition by LGDC in favour of NSL. When Mr Gardner questioned the low price, pointing out that the transaction could be challenged at a later date, Mr Liu explained to Mr Gardner that the price originally paid included fixtures and fittings [Mr Liu's witness statement appendix volume 4 tab 140 paragraph 10], and also that there had been poor trading, thus the value of the asset had decreased [Mr Gardner's affidavit dated 22 March 2010 paragraph 20(a)]. However in his subsequent dealings with the liquidator from November 2002 onwards, and in his evidence during the proof in the present action, Mr Liu maintained that the price had been enhanced by NSL's undertaking to repay £1.85 million representing what was said to be LGDC's indebtedness for loans made to it by the Liu family. While Mr Liu in evidence initially maintained that he had advised Mr Gardner about the enhanced price before the disposition was signed [appendix volume 5 tab 157 page 21], then that he might not have told him, his ultimate position in evidence was that he deliberately gave Mr Gardner no such information because Mr Gardner had prepared all the deeds, it would be expensive to have them changed, and he would look "like a fool" if he told Mr Gardner about the enhanced consideration. His evidence [appendix volume 5 tab 159 page 286] included the following:
"... In order for me to get it corrected, Dan [Mr Gardner] is going to have to redo all his documents, and you know how expensive lawyers are. You know how much this whole thing has been costing me? You know, over £600,000 since 2002. I know how expensive lawyers are, so when I saw the thing from Dan, I thought, 'Well, let me get this processed first and I'll deal with it later' because I didn't think that it would be easy enough for me to explain it to him and say, 'Well, we'll do this, we'll do that' and so forth. You know, I'll say another thing. You know, Chinese people believe in honour. Now, how would I look? Like a fool. Here he is creating all this thing and so forth and says, 'Oh, damn! There is this thing that was here that I've forgotten to tell you about before we need to rectify first' and so forth, so, to me, at that moment I felt like a fool, so I thought, 'Well, let me wait a little bit. Let me sign it, get it over with' and so forth ..."
Mr Gardner in his affidavit dated 22 March 2010 was adamant that he was not told that the price had been enhanced to over £2 million. At paragraphs 22 and 26, he observed:
"22 ... I would not have signed [the disposition] nor would I [have] arranged for payment of the stamp duty of at a level of approximately £2,400.00, if I had been instructed that consideration was greater than £248,100.
26 ... I was specifically not advised that the purchaser [NSL] was accepting liability for the debt of £1.85 million as part of the consideration either before, during, or after the 8th February 2001."
As noted by the Lord Ordinary at paragraph  of his opinion, Mr Gardner had never seen any document concerning an assumption of debt by NSL.
 Importantly, the Lord Ordinary did not find as a fact that NSL had undertaken any liability for £1.85 million as at the date of the grant of the disposition on 12 February 2001. As he put it in paragraph  of his opinion:
" It is not clear to me on the evidence when the documentation purporting to evidence the assumption of the loan by NSL was created, nor indeed when the decision was made that the amount of debt assumed would be £1.85 million rather than some other figure. Mr Liu acted for both LGDC and NSL (albeit under different names) and also took the necessary decisions so far as concerned the loans from members of his family. To that extent, once the decision was made, the documentation could follow later. It was not suggested in argument that the subsequent creation of documents to record the assumption of the loan as part of the consideration for the sale in any way invalidated what had occurred if the decision had in fact been made to assume part of the loan as part of the consideration. I find that that decision had been made."
 Having received the signed acceptance of the offer of sale at a price of £248,100, Mr Gardner, as LGDC's solicitor and company secretary, proceeded to draft and sign a disposition dated 12 February 2001 conveying the heritable property known as Letham Grange to NLS as trustee for an undisclosed beneficiary for a consideration of £248,100. No sum amounting to £248,100 passed through any client account at MacRoberts [Mr Gardner's affidavit dated 22 March 2010 paragraph 20(d)]. No bank statement, paid cheque, or bank transfer was produced in the current action to vouch the passing of £248,100 from NSL to LGDC. The only sources of evidence relating to the £248,100 were:
· The clause in the disposition
· Company documents from both LGDC and NSL (for example, minutes of board meetings apparently attended by Mr Liu alone) in which it is stated that the relevant company agrees to the purchase/sale of Letham Grange at a price of £248,100.
· Mr Liu's evidence at the proof.
 Subsequently, NSL leased the resort back to LGDC. The resort continued to run as before.
 Mr Liu asked a friend Miss Lee Fon Yi to become president of NSL. She was duly appointed president on 3 September 2002, and Mr Liu became vice-president.
 Following upon non-payment of a debt, a petition for LGDC's liquidation was presented, and the liquidator was appointed (the provisional appointment being on 15 November 2002, and the interim appointment on 3 December 2002). The liquidator entered into office, and inter alia examined the company's records and documents. He found no copies of, or references to, any letters (later produced in 2003 by Mr Liu as described in paragraphs ,  and  below) relating to any loans by the Liu family to LGDC in connection with the purchase of Letham Grange in 1994. Nor did he find documents relating to any undertaking of liability for debt by NSL as part of the price which NSL paid for the acquisition of Letham Grange in 2001. As the liquidator later stated in his evidence [appendix volume 7 tab 167 page 885]:
"I had been in office since November . There had been no mention of any part of the sale transaction involving settlement of family loans, so I thought it was rather odd that several months later [in February 2003] this was mentioned to me for the first time, and that soon afterwards documents appeared, which seemed to back up a position that would be pretty helpful to them, which somehow were not available in the preceding months."
 The standard security by NSL in favour of Foxworth, currently under challenge, bears the date 6 January 2003. Mr Liu under the name "Peter D Liu" had been a director of Foxworth since 17 December 1999 (paragraph  of the Lord Ordinary's Opinion).
 On 8 February 2003, at which time there had, as yet, been no challenge to the 2001 disposition by the liquidator, the Liu family (using Brodies as their agents) lodged claims in the liquidation. Significantly, those claims did not reflect any assumption of liability by NSL for £1.85 million of Liu family loans. Nor did they reflect any other assumption of liability for Liu family loans - for example, that said to have been undertaken in January 2003 by Foxworth to the extent of £1.7 million: see paragraphs  and  below).
 At about this time, the liquidator was given copies of "the December 1994 loan letters", which are referred to in greater detail in paragraphs  and  below [appendix volume 7 tab 167 page 897]. The liquidator did not accept the Liu family claims in the liquidation, on the ground that there was no proper evidence to support their claims which would have entitled them to vote [appendix volume 7 tab 167 page 894]. The liquidator also intimated to Brodies that he was considering challenging the 2001 disposition as a sale at an undervalue and therefore reducible as a gratuitous alienation or a fraudulent preference. Following upon that intimation, the liquidator received a telephone call on 11 February 2003 from a Mr Tony Freeman, an insolvency practitioner based in Manchester, who was advising Mr Liu. Mr Freeman told the liquidator that the sale to NSL was not at an undervalue, because part of the purchase price paid by NSL had been the undertaking of liability for repayment of Liu family loans. That was the first time that the liquidator had heard any suggestion that the price might be anything other than a cash price of £248,100 [see the letter from the liquidator to Brodies dated 17 February 2003 appendix volume 2 tab 76, and the liquidator's comments noted in paragraph  above.].
 On 14 February 2003, a meeting of creditors took place and the liquidator's appointment became permanent. At that time, nothing was said to the liquidator about the existence of any standard security securing a loan of £2 million over Letham Grange. It was not until 2009, after the reduction of the 2001 disposition, that the liquidator was told of the standard security. During his evidence, Mr Liu explained that the standard security related to a loan, said to have been made in 2001, from Foxworth to NSL to enable NSL (which had no funds) to purchase Letham Grange from LGDC. As the Lord Ordinary noted in paragraph  of his Opinion:
"... Mr Liu explained in cross-examination that in order for NSL to be able to pay the £248,100 to LGDC, it needed to find money from somewhere. NSL borrowed £300,000 from Foxworth. It was not explained why NSL was introduced if it did not have the money to pay LGDC, but again, in fairness to Mr Liu, he was not asked about this in any detail. Mr Liu said that in return for the loan of £300,000, NSL gave Foxworth a personal bond to record the loan and granted Foxworth a standard security over the property as security for repayment. None of this was referred to on record, and neither that personal bond nor the standard security was produced (if they ever existed). However, in any event, that standard security (if it was granted then) was never registered ..."
 Mr Liu explained in paragraph 17 of his witness statement (appendix volume 4 tab 140 - quoted in paragraph  below) that a standard security for the £300,000 loan was drawn up and signed, but not recorded. When, however, it was decided that Foxworth would also assume liability for £1.7 million of debt owed to the Liu family, (as to which see paragraph  below), it was decided to have a fresh standard security (currently challenged by the liquidator) and personal bond for £2 million drawn up.
 LGDC, NSL, and Foxworth were, as already noted, companies wholly controlled by Mr Liu. The only evidence of a loan of £300,000 made from one of his companies (Foxworth) to another of his companies (NSL) came from Mr Liu himself in his witness statement and when he gave evidence in court. No other person or document vouched the actual transfer of £300,000 from Foxworth to NSL. No bank statement, paid cheque, or bank transfer vouching the passing of the money were produced. The money did not pass through any client account at Messrs MacRoberts, Mr Liu's solicitors. It was only when Mr Liu lodged his witness statement in the current proceedings that it became clear that Mr Liu maintained that Foxworth had lent NSL £300,000 in 2001.
 On 11 April 2003 the liquidator, quite unaware at that stage of the existence of any other deed affecting Letham Grange, raised an action seeking reduction of the 2001 disposition on the ground that it was a gratuitous alienation in terms of section 242 of the Insolvency Act 1986, alternatively that it was a fraudulent preference at common law and/or an unfair preference in terms of section 243 of the 1986 Act.
 On 20 June 2003, the standard security (drafted by Mr Liu and dated 6 January 2003 but still not intimated to the liquidator), was presented to the Keeper of the Land Register for registration - not by MacRoberts, but by Brodies. Mr Liu had sent the deed (completed and signed) to Brodies with instructions that it be presented for registration.
 Further in June 2003, the Liu family note in the liquidation was adjusted to take account of the claimed assumption of liability of £1.85 million for Liu family loans attributed to NSL (although, interestingly, no adjustment was made in respect of any assumption by Foxworth of liability of £1.7 million for Liu family loans, referred to in paragraph  below). Documentation purporting to vouch the Liu family loans was produced in the form of "the December 1994 loan letters" (paragraph  below). Mr Gardner had never seen these letters, despite his request on 22 February 1995 to see something in writing vouching the loans (paragraph  above).
 Four of the five December 1994 loan letters were on LGDC headed notepaper bearing the date 5 December 1994 and signed by Mr Liu using the name "Dong Guang Liu". Those letters were said to be acknowledgements of loans to LGDC from four people namely Mr Liu, his wife, and his parents. They consisted of (i) a letter bearing the date 5 December 1994, acknowledging that £460,910 had been lent by Tong Kuang Liu (Mr Liu himself): appendix volume 1 tab 31; (ii) a letter bearing the date 5 December 1994, acknowledging that £680,000 had been lent by Mr Liu's wife Ms King Hsia Chow Liu: appendix volume 1 tab 29; (iii) a letter bearing the date 5 December 1994, acknowledging that £680,000 had been lent by Mr Liu's mother Shiau Cheng Tzu Liou: appendix volume 1 tab 30; (iv) a letter bearing the date 5 December 1994, acknowledging that £350,000 had been lent by Mr Liu's father Jieh Jow Liou: appendix volume 1 tab 32. A fifth letter on LGDC headed notepaper was dated 8 December 1994 and addressed to Coquihalla: appendix volume 1 tab 33. It acknowledged Coquihalla's "help" in borrowing £200,000 from Sanwa Bank, with the loan to be repaid by 25 October 2000.
 On 18 June 2003, Mr Macpherson of Brodies (acting for Mr Liu and his family in the sheriff court liquidation proceedings) told Mr Liu that he needed a statement from J Michael Colby whose name appeared in the documentation [appendix volume 4, tab 139, 61/139/18]. Mr Liu's first response was that "that would be difficult". Subsequently Mr Liu acknowledged to Mr Macpherson that Mr Colby was none other than himself, Mr Liu.
 In 2007, after the House of Lords had returned the action for reduction of the 2001 disposition to the Court of Session (2006 SC (HL) 85), Mr Liu entered into negotiations with the tax authorities. On 15 June 2007, he paid additional stamp duty appropriate for a total consideration of £2 million in respect of the sale of Letham Grange in 2001 by LGDC to NSL, together with interest for late payment. The 2001 disposition remained unchanged (ie with the consideration stated to be £248,100) but with a considerable number of additional stamps added to the front page.
 On 6 January 2009 (not 6 December 2009 as noted in paragraph  of the Lord Ordinary's opinion), decree in absence was granted in the liquidator's action for reduction of the 2001 disposition.
 Later in 2009, the liquidator was shown - for the first time - the personal bond for £2 million and the standard security over Letham Grange, dated 6 January 2003, by NSL in favour of Foxworth.
 Subsequently, the liquidator raised the present action for reduction of that standard security.
 In the course of the present action, Mr Liu lodged a witness statement [appendix volume 4 tab 140]. That witness statement contained the following information in paragraph 17:
"In around 2003, I agreed with my wife and parents that Foxworth Investments Ltd, another of our family companies, would undertake some of the liability to repay them. Foxworth had provided £300,000 or so to [NSL] at the time [NSL] had paid for the Resort and the intention was that a standard security for that sum would be taken and registered. I recall very clearly that a standard security was drawn up and signed. I did not, however, have it recorded straight away. I thought (and I may be wrong about this) that I could not record the standard security until the title deeds in the name of [NSL] had been issued. I remember asking Dan Gardner on many occasions whether the title had been issued and he told me to be patient. Eventually, when we decided that Foxworth would assume liability to repay money to my family, I decided that I would get a fresh standard security and personal bond drawn up. Foxworth assumed liability to repay £2,000,000 in total and the personal bond was for that sum. The standard security and personal bond were both signed on behalf of [NSL] by Lee Fon Yi ... We continued to wait and ask if the title was issued. Eventually, we finally got a number from the Land Register and we then registered the security."
 That was the first time that the liquidator was told that there had been a loan of £300,000 in 2001 by Foxworth to NSL. It was also the first time that Mr Liu stated that the standard security secured not only that loan of £300,000, but also the undertaking of a liability by Foxworth (for no particular reason) to repay Liu family loans totalling £1.7 million. As the Lord Ordinary put it in paragraph  of his Opinion:
" In cross-examination, Mr Liu sought to justify the Personal Bond, granted in 2003, by reference in part to this involvement of Foxworth in 2001. The amount of the bond (£2 million) was made up of the £300,000 lent by Foxworth to NSL in 2001 plus an assumption by Foxworth in 2003 of £1.7 million of the Liu family loans. It at first appeared that Mr Liu was saying that Foxworth had assumed £1.7 million of the debt assumed by NSL, but he was adamant under repeated questioning that that was not the case. According to his evidence in cross-examination, Foxworth did not assume any part of the £1.85 million debt assumed by NSL. Rather it assumed £1.7 million of the Liu family debt plus interest that remained with LGDC. I found this surprising, but the reasons behind it, if it be true, were not explored in evidence. Certainly, the suggestion that Foxworth had assumed part of the LGDC debt was never mentioned in the sheriff court proceedings. Mr Liu did not recall if he had told Mr Macpherson [of Brodies, solicitors] about it, and, for the reasons given earlier, I must assume that he did not. It raises the question, if true, why that sum should be included in the personal bond granted by NSL to Foxworth. NSL held all its assets on trust for an undisclosed company, but in any event its net worth was zero, the value of the golf course being approximately equal to the amount of the loan which it assumed. Mr Liu agreed that it seemed illogical but he thought that it made sense for NSL, if it owned the property, to undertake an obligation to Foxworth in addition to the £1.85 million loan it had already assumed ..."
 Mr Liu is described by the Lord Ordinary at paragraph  of his opinion as having "an acute business intelligence". In paragraph 3 of his witness statement [appendix volume 4 tab 140] Mr Liu described himself as having a variety of business interests in a number of countries. Mr Liu's business practices (as established by evidence during the proof before answer) included the following.
The use of several
names and several apparently separate personae
 Mr Liu used several names, including "Dong Guang Liu", "Peter Liu", "Tong Kuang Liu", and "J Michael Colby". In evidence, he explained that he used the latter name to avoid what he perceived to be discrimination in the west against persons with oriental names. The use of these names often obscured the fact that Mr Liu was the sole participant and/or the sole directing mind behind a transaction. What follows are one or two instances:
· Mr Liu completed documents such that he was both the addressee (using one name) and the writer (using another name). For example, (i) in relation to the source of the £1.892 million transferred to his Scottish solicitor from Sanwa Bank in 1994 (referred to in paragraph  above) Mr Liu relied upon the December 1994 loan letters. One of those letters was addressed to himself as Tong Kuang Liu, and signed by himself as Dong Guang Liu. (ii) The letter of sale dated 7 February 2001 relating to Letham Grange was signed by Mr Liu on behalf of NSL using the name "J Michael Colby". His solicitor Mr Gardner was unaware that Mr Colby was Mr Liu. (iii) Another example of Mr Liu's being both addressee and addressor was the letter dated 28 February 2001 containing a lease-back arrangement between NSL and LGDC. That letter was addressed to Dong Guang Liu on behalf of LGDC, and signed by J Michael Colby on behalf of NSL. (iv) A fourth example can be found in the letter dated 28 February 2001, confirming the purchase of Letham Grange. As is set out in paragraph  of the Lord Ordinary's opinion, Mr Liu wrote to himself as follows:
"Dear Mr Liu
This is to confirm that we have purchased all the assets of [LGDC] - inclusive of the golf courses, restaurants, curling rink, and related businesses on the grounds and buildings.
This is also to acknowledge that in addition to the purchase price, we will further assume 1,850,000 UK pound sterling of extra other debt liability of [LGDC] to the Liu Family. We will pay an 8.5% annual interest fee on the debt and it is to be repaid by February 27, 2004. Please sign at the bottom for your acceptance of the above.
J Michael Colby
· Mr Liu did not tell his Scottish solicitors about his use of the name J Michael Colby. Thus his solicitor Mr Gardner of MacRoberts was wholly unaware that the docquet of acceptance on the letter of sale relating to Letham Grange (addressed to NSL and dated 7 February 2001) had in fact been signed by Mr Liu himself using the name J Michael Colby as director of NSL. Mr Macpherson of Brodies (instructed by Mr Liu in respect of Liu family claims in the sheriff court proceedings for the liquidation of LGDC) was for some time unaware that the person known as J Michael Colby was in fact Mr Liu. Thus in a Note of Adjustments in June 2003 (see paragraph  above) Mr Macpherson referred to the First Noter (Tong Juang Liu) and to Mr Colby as if they were two different persons. The fact that they were one and the same person came to light only when Mr Macpherson e-mailed Mr Liu saying that a statement from J Michael Colby would be required [appendix volume 4 tab 139, 61/139/18]. Mr Liu's initial response was that "that would be difficult". He later acknowledged that he himself was J Michael Colby.
The use of friends
 Mr Liu used friends and relatives to act in certain capacities on his behalf, and to sign deeds as directed. Although Mr Liu maintained in evidence that those persons understood the business affairs in which they were involved, other evidence suggests that they simply obeyed Mr Liu unquestioningly and without necessarily understanding much (if anything) about the transaction.
 For example, Miss Lee Fon Yi of Tansui, Taipei, gave evidence by video-link inter alia confirming the content of her witness statement [appendix volume 6 tab 161 page 758 et seq]. She explained that she was appointed director and president of NSL on 3 September 2002 [appendix volume 1 tab 3 page 61/3/15]. She stated candidly that she took no business decisions. The company was run by Mr Liu. When Mr Liu asked her to sign formal documents, she did so. At his request, she signed the challenged standard security dated 6 January 2003 by NSL in favour of Foxworth over Letham Grange, and also the related personal bond for £2 million. She showed little understanding of the circumstances of these transactions. She did not know what assets or liabilities NSL had at the time. Nor did she know that the "J Michael Colby" who was her predecessor as director and president of NSL was in fact Mr Liu.
 As for Mr Liu's parents and wife, as Mr Liu explained in paragraph 11 of his witness statement lodged on 22 March 2010 [appendix volume 4 tab 140]:
"... [they] are in their 80s and in wheelchairs. They and my wife expect me to run the family's business affairs and make all decisions on their behalf. It is very much left to me to decide how best to run the businesses and, though I consult and inform my family as I feel appropriate, I do not for example take or keep minutes or notes of our discussions ..."
That assessment was confirmed by the evidence given by video-link by Mr Liu's parents and wife during the proof before answer.
Control of all
participants in transactions
 From the evidence, it appears that Mr Liu controlled everything and everyone in the relevant transactions, including NSL; Foxworth; the relevant members of the Liu family; and LGDC until its liquidation on 15 November 2002.
A tendency to
withhold information (or to give partial or inaccurate information) to his
 As noted in paragraph  above, Mr Liu did not tell his Scottish solicitors about his use of the name J Michael Colby. There were other examples of his failure to give information to his solicitors. In 2001, Mr Liu did not give his Scottish solicitor Mr Gardner information such that the latter was alerted to the fact that the price or consideration for the sale of Letham Grange to NSL was claimed to be over £2 million, said (subsequently) by Mr Liu to comprise a money payment from NSL of £248,100 and an undertaking by NSL to repay Liu family loans of about £1.85 million. Mr Liu was content to allow Mr Gardner, acting as company secretary on behalf of LGDC, to prepare and sign a disposition in which the consideration was recorded - inaccurately, according to Mr Liu - as £248,100, with the usual clause certifying that the transaction was not part of a larger transaction or series of transactions for a larger sum. Thereafter stamp duty of £2,485 was calculated and paid on the basis a sale price of £248,100. In this context, it is worth noting the changes in position in Mr Liu's evidence. Initially he maintained that he had told Mr Gardner about the whole arrangement, namely a money payment and NSL's assumption of liability of £1.85 million in respect of Liu family loans [appendix volume 5 tab 157 page 21]. At an intermediate stage, he accepted that he might not have told Mr Gardner about the assumption of liability for Liu family loans. His ultimate position was that he had deliberately not told Mr Gardner about that matter, because the latter had already prepared all the legal documents and it would be expensive to have them re-drafted (see paragraph  above). Also he commented that, if he had to tell his lawyer this piece of information, he would have looked "like a fool". On any view, Mr Liu's changes of position during his evidence were remarkable.
The creation of
 Mr Liu created many of his own legal documents, such as the December 1994 loan letters, the standard security challenged in this action, and the accompanying personal bond (the latter two signed by Miss Lee Fon Yi). As already noted, although dated 6 January 2003, the security was not sent to solicitors with a request that it be registered until June 2003.
The dubious dating of
 The Lord Ordinary acknowledged that it was doubtful whether some of the documents provided by Mr Liu had indeed been created or executed on the date they bore. For example, the loan letters bearing dates in December 1994, said to acknowledge loans from members of the Liu family to LGDC and the loan guarantee by Coquihalla, were not shown to Mr Gardner of MacRoberts, despite his fax to Mr Liu date 22 February 1995 requesting "any written agreements in respect of the loans". As the Lord Ordinary put it in paragraphs  and  of his Opinion:
" I accept ... that there is some doubt about when the 1994 letters, recording the loans by Liu family members and by Coquihalla to LGDC, were produced [sc 'created'], since they were not shown to Mr Gardner at the time of LGDC's purchase of Letham Grange in 1994 in circumstances where one would have expected them to have been shown to him had they been in existence at that time ...
 ... it may ... be that the letters of 5 and 8 December 1994 were written and signed some time later."
 Moreover the Lord Ordinary noted that in response to Mr Gardner's specific inquiries, not only did Mr Liu not show him the December 1994 loan letters, but Mr Liu advised him by fax that there were eight lenders. By contrast the December 1994 loan letters referred only to four lenders and to Coquihalla's help with Sanwa Bank. Nevertheless Mr Liu maintained in paragraph 6 of his witness statement [appendix volume 4 tab 140] and in evidence during the proof in the present action that he wrote the letters on the dates they bore.
Submissions for the
 Senior and junior counsel invited the court to allow the reclaiming motion, to recall the Lord Ordinary's interlocutor of 12 April 2011, and to grant decree of reduction of the standard security in terms of the second conclusion. Counsel submitted that: (1) Even on the basis of his own findings-in-fact, the Lord Ordinary had fallen into error. No specific date had been determined for NSL's claimed assumption of liability for Liu family loans of £1.85 million (paragraph  of the Lord Ordinary's opinion). Yet it was essential for value and good faith that the assumption of liability had been made at the date of the disposition. Thus the Lord Ordinary had gone plainly wrong. Decree for reduction should have been granted. (2) In any event, the major part of the Lord Ordinary's findings in fact was flawed. The evidence was therefore at large for the appeal court to consider.
findings made by the Lord Ordinary ought themselves to have resulted in
decree of reduction
 In paragraph , the Lord Ordinary had made no finding in fact about when NSL had undertaken legal liability for £1.85 million. In particular, he had not found that there was an enforceable obligation relating to liability for £1.85 million in existence at the date of the disposition (12 February 2001). It was insufficient to conclude that a "decision had been made". Reference was made to Goudy, Bankruptcy page 50; Matheson's Tr v Matheson 1992 SLT 685; MacFadyen's Tr v MacFadyen 1994 SC 416 at page 421; Cay's Tr v Cay 1998 SC 780. The only enforceable consideration was clearly inadequate (being £248,100 in respect of property worth £1.8 million). The 2001 disposition was therefore a gratuitous alienation. That coloured all subsequent actings, and in particular the granting of the standard security. On his own findings in fact, the Lord Ordinary should have granted decree of reduction.
to the Lord Ordinary's findings in fact
 In any event, many of the Lord Ordinary's findings in fact were challenged as unfounded. The Lord Ordinary had failed properly to assess the evidence, in particular by cross-checking Mr Liu's evidence against objective facts (cf Civil Appeals, Principles and Procedure (2010) at page 83 et seq). He had gone plainly wrong.
 The circumstances surrounding the 2001 sale of Letham Grange pointed to the shifting of a major asset from a financially-challenged company to another company (NSL) set up for that purpose by Mr Liu. As for the subsequent standard security granted by NSL to Foxworth (another company set up and controlled by Mr Liu), the evidence suggested that NSL never intended to pay Foxworth any money, as NSL had no assets. The consequence would be that Foxworth would proceed to call up the standard security, and to claim the heritable property over which the security had been granted (Letham Grange). The ultimate outcome would be the shifting of the valuable asset from LGDC to Foxworth, well out of the reach of the liquidator, even if the disposition by LGDC were reduced (as it had been by decree dated 6 January 2009).
 Those manoeuvres were not novel in the context of insolvency. But what was remarkable was that the Lord Ordinary's opinion did not deal squarely with the liquidator's principal submission, namely that the transactions were a sham, concealing an asset-shift in order to evade the liquidator. The circumstantial evidence, the overall picture, pointed to asset-shifting in insolvency. Rather than the underlying motive for the various transactions being "elusive" or "a mystery" (the Lord Ordinary's words in paragraphs  and ), it was all too obvious. Mr Liu had resorted to subterfuge, or at least to appearances which misled. For example, NSL appeared to be a Canadian-registered company with a president named "J Michael Colby". Thus an ordinary observer might think that NSL was a separate independent person. But it was not. It had been created by Mr Liu to play a part in his scheme of transactions the purpose of which was to defeat the liquidator by placing the major asset beyond his reach. The Lord Ordinary's error had been to fail to address the liquidator's principal contention, and to bear that contention in mind when assessing all the evidence and when forming a view about credibility.
 Counsel submitted that there was no good reason underlying the sale of Letham Grange at a price of £248,100 in 2001. For example, there was no document vouching the calling-up of any guarantee or loan by Coquihalla. In any event LGDC could have arranged a loan without being driven to sell the whole property at an undervalue. All the objective evidence pointed to a consideration of only £248,100 (for example, Mr Gardner's lack of awareness of any greater price; the formal clause in the disposition; the stamp duty paid; the undiscounted Liu family claims lodged in the liquidation). Those were objective facts which it was necessary for the Lord Ordinary to deal with.
 As for the December 1994 loan letters said to vouch loans amounting to £1.85 million by the Liu family, it was only in 2003 that those letters were produced in connection with a note of adjustments of the Liu family claims in the liquidation. They had not been shown to Mr Liu's Scottish solicitor Mr Gardner in February 1995 when Mr Gardner specifically asked Mr Liu for something in writing to vouch what Mr Liu was saying about Liu family loans. On the contrary, Mr Liu sent Mr Gardner a fax at that time, indicating that eight people had lent the money (see paragraph  above). Counsel submitted that one did not have to be unduly suspicious to regard the appearance of these documents, years later in 2003 in the context of a possible asset-shift and evasion of the liquidator, as questionable. The Lord Ordinary expressly stated in paragraph  of his opinion that he did not accept that the letters had been written in 1994, but then dismissed this fact with the phrase "nothing turns on this". On the contrary, one might think that something did turn on it: the fact that the letters might have been compiled some time after December 1994, and the fact that they only came to light in 2003 when the liquidator was challenging the 2001 disposition, suggested that the Lord Ordinary should at least consider the possibility that Mr Liu was not telling the truth at all, and that he was engaged in an asset-shift camouflaged by sham transactions.
 NSL's alleged assumption of liability for Liu family loans had not been revealed over the years to anyone. The clear inference was that it had never happened. It was later made up when Mr Liu realised that the 2001 disposition in favour of NSL was threatened by the liquidator. Similarly Mr Liu's use of the name J Michael Colby was not revealed to anyone. Nor had bank statements been produced showing the provenance and the destination of the relevant sums of money in this case. Often the only witness to explain an alleged transaction and its underlying reasons was Mr Liu himself.
 The weight of the evidence suggested that Mr Liu was fabricating his evidence. Mr Liu was putting transactions and paperwork in place to prevent Letham Grange from falling within the liquidator's control. The Lord Ordinary's conclusion relating to Mr Liu's credibility was unsupported by evidence or by reasoning. The reclaiming motion should be allowed and the Lord Ordinary's interlocutor recalled.
Submissions for the
The reclaiming motion
 Senior counsel for the defenders invited the court to refuse the reclaiming motion. There had been no error of law. Paragraph  of the Lord Ordinary's opinion should be read to the effect that, whatever the precise date, the "decision" that the amount of debt assumed would be £1.85 million had been taken prior to 12 February 2001, being the date of the disposition to NSL. For the rest, the thrust of the liquidator's argument was that the Lord Ordinary's findings in fact had been perverse. That was a very high test, which was not satisfied in this case. In fact the liquidator was inviting the appeal court to re-try the case on paper: but even if the Inner House were persuaded that they would or might have reached a different conclusion, that failed to meet the test that the Lord Ordinary had gone "plainly wrong" (paragraph  of Thomson v Kvaerner Govan Ltd 2004 SC (HL) 1). It was not the function of the appellate court to re-examine the evidence as a paper exercise.
 Even if the Lord Ordinary had not specifically mentioned something, it could not be assumed that he had not taken it into account. It was said that the Lord Ordinary had failed to give adequate reasons, but it was inconceivable that the Lord Ordinary had overlooked the nature of the liquidator's major submission, namely that the network of transactions was a sham. The Lord Ordinary had not positively rejected Mr Liu's explanation concerning the rationale behind the 2001 transaction. In any event, counsel submitted that the Lord Ordinary was entitled to take the view that it was unnecessary, when assessing whether or not the standard security had been taken in good faith and for value, to decide the question whether the 2001 transaction was a sham. The Lord Ordinary's assessment of Mr Liu had been nuanced, discriminating, and realistic. He had believed Mr Liu in the "essentials of his case" (paragraph  of his opinion).
 In relation to the Liu family loans: even if the Lord Ordinary considered that the December 1994 loan letters were falsely dated, he had other evidence entitling him to conclude that Liu family loans were indeed made. There was Mr Liu's evidence [his witness statement, volume 4 tab 140 paragraph 5]. There was evidence from three family members, confirming Mr Liu's evidence [appendix volume 6 tab 161 pages 679, 681, 723, and volume 7 tab 167 page 921]. There was Mr Gardner's evidence [appendix volume 6 tab 160 page 485]. There was no positive evidence that the money had come from somewhere else. As for any discrepancies in the evidence about how the family loan was split amongst the members (for example the "eight" against the "four" lenders), Mr Liu explained in his evidence [appendix volume 5 tab 158 page 186) that a different pattern of lending had been discussed, but never implemented. The Lord Ordinary stated in terms that he did not rely upon the December 1994 loan letters in relation to his conclusion about the Liu family loan, and that he found the evidence that the Liu family had made a loan of over £2 million in 1994 to be "overwhelming" (paragraph  of his opinion). He was entitled, on the evidence, to reach that view.
 As for the question whether Mr Liu told his solicitor Mr Gardner that the consideration for the 2001 disposition was greater than £248,100, counsel accepted that there had been a development in Mr Liu's position during his evidence. But that happened in many cases. The proper construction of his evidence, and the weight to be given to certain answers, were very much matters for the Lord Ordinary. The Lord Ordinary was entitled to reconcile and make sense of Mr Liu's evidence. He had not misapprehended the evidence or omitted to take anything into account.
 Indeed there were many questions which were for the Lord Ordinary's assessment and decision. The additional consideration for the 2001 disposition could have been paid at any time after 8 February 2001 (the date on which Mr Liu received Mr Gardner's fax dated 7 February 2001 warning him about the vulnerability to challenge of a transaction with a price of £248,100). The disposition had not been signed until 12 February 2001. The subsequent lodging of apparently excessive Liu family claims in the liquidation could have been because Mr Liu had simply failed to put "two and two together" (paragraph  of the Lord Ordinary's opinion).
 If Foxworth took the 2003 standard security in good faith and for value, that standard security was valid, notwithstanding the reduction of the 2001 disposition. On the evidence led, the Lord Ordinary was entitled to conclude that the standard security was granted for a value of at least £300,000. The issue of the £1.7 million remained an open question. But provided that the standard security secured some debt, it was for value. As for good faith, neither NSL nor Foxworth were insolvent. Foxworth was therefore entitled to undertake an obligation to repay a Liu family loan of £1.7 million. NSL was entitled to give Foxworth a standard security. Even if it were assumed that there had been no commercial purpose underlying the transactions, that did not amount to taking the security in bad faith. Only knowledge on the part of Foxworth of the susceptibility of the 2001 disposition to challenge could mean that Foxworth was in bad faith.
 As for the use of different names, Mr Liu had explained to the court why he adopted that practice. He had not necessarily explained why his solicitors Mr Gardner and Mr Macpherson were unaware of all of his various names, but the Lord Ordinary was entitled to accept the explanations which he had given.
 In conclusion, senior counsel submitted that it was almost inconceivable that the Lord Ordinary had failed to recognise that he was faced with the proposition that the transactions were inter-related and that they were a sham. The Lord Ordinary carefully examined how Mr Liu behaved in the witness box. He took into account all the criticisms (paragraph  of his opinion). It was simply not possible to reach the conclusion that no reasonable Lord Ordinary could have reached the result he had reached, even if every member of the appeal court bench would have reached a different conclusion.
 In the result, the attack upon the Lord Ordinary's reasoning failed, and the reclaiming motion should be refused.
 The defenders had a cross-appeal. By interlocutor of 17 June 2011, the Lord Ordinary had found the liquidator liable to the defenders in the expenses of process, but had added a proviso that the interlocutor relating to expenses should not be enforced "without further order of the court". In paragraph  of his opinion of 17 June 2011, the Lord Ordinary noted that the liquidator had previously been awarded expenses of £116,564.24 in the action of reduction of the 2001 disposition in which decree in absence had been granted on 6 January 2009. In paragraph  of his opinion, the Lord Ordinary explained that he was reluctant to allow the defenders to enforce an order for expenses against the liquidator when the latter held an order for expenses in his favour in respect of the earlier action which had not yet been satisfied. In paragraph , there was reference to a Supreme Court case where a stay of execution had been made.
 Counsel submitted that the Lord Ordinary had erred in adding the proviso. He had relied upon two English cases and a specific rule in the Supreme Court providing for special circumstances rendering it inexpedient to enforce a judgment or order (RSC Ord 47 rule 1(1)(a)). In one case, it had been considered expedient to allow the claimed retention until the outcome in a related litigation was known. But such cases were not relevant to the Scots law of compensation, where there required to be a concursus debiti et crediti. The Lord Ordinary erred in failing to appreciate that (i) the present case was a straightforward claim for compensation, and not a case of retention; (ii) compensation or set-off was not a matter of what might be regarded in the Lord Ordinary's discretion as "just", but had to be applied according to law. In the present case, the plea of compensation could not in law succeed. The Lord Ordinary had not lifted the veil of incorporation and determined that NSL and Foxworth were the same person. The Lord Ordinary had erred in adding the proviso to the interlocutor of 17 June 2011. The interlocutor should be varied by deleting that proviso.
Reply for the
 In relation to the cross-appeal, senior counsel for the liquidator submitted that the Lord Ordinary had simply sought to do substantial justice. It was accepted that the liquidator's liability still had to be assessed by the auditor. Thus the judge's approach was perhaps novel: but nevertheless it was an approach that had been adopted before. If, of course, the liquidator were to be successful in the reclaiming motion, the award of expenses against him flew off.
(i) The consideration given for the purchase of Letham Grange in 2001: error in law
 As was observed in Matheson's Tr v Matheson 1992 SLT 685 at page 686G-H:
" ... the giving of 'consideration' involve[s] either the discharge of an existing obligation or an exchange of new obligations ..."
 In MacFadyen's Tr v MacFadyen 1994 SC 416, it was explained at page 421 that:
"... [the] word 'consideration' is not defined in the [Bankruptcy (Scotland) Act 1985] and we consider that it must be given its ordinary meaning as something which is given, or surrendered, in return for something else. If something is given without any return being demanded or expected or obtained and at the time of giving is not intended to be regarded as a consideration for some past, present or future return ... that which is given cannot later be converted into a consideration just because at the later date the giver and receiver chose so to describe it. A consideration appears to us to acquire its character as a consideration not later than the time when the giving or surrendering takes place. In the context of bankruptcy law, the bankrupt debtor must be regarded as a trustee for the creditors in respect of such of his assets as are under his control. In that context, it is our view that a consideration must mean something of a material or patrimonial value which could be vindicated in a legal process, whether by being claimed or possibly by being pled in answer to another's claim ..."
 Similar guidance can be found in Cay's Tr v Cay 1998 SC 780 at page 785E, and Goudy, Bankruptcy page 50.
 Against that background, it is my opinion that the consideration allegedly given in exchange for the granting of the disposition of Letham Grange to NSL required to be enforceable (ie able to vindicated) at the time when the disposition was granted on 12 February 2001. On the Lord Ordinary's own findings, however, there was no enforceable obligation binding NSL to repay Liu family loans as at that date. Taken in context, I am quite unable to read the words "part of the loan" in the penultimate line of paragraph  of the Lord Ordinary's opinion as being referable to the precise or calculated figure of £1.85 million but, even if they were so read, I doubt whether, in the absence of any documentation whatsoever, the "decision" in question could properly be regarded as any more than a statement of intent on the part of Mr Liu. The position is even clearer if the Lord Ordinary's true meaning was that he simply could not say when that figure had been arrived at, any more than when the documentation evidencing the loan had been created.
 I am accordingly of the opinion that it was not open to the Lord Ordinary to accept that consideration was given in exchange for the disposition granted in the form of some vague obligation undertaken by NSL to repay Liu family debt. That left the consideration at £248,100. Such a price was clearly an undervalue for Letham Grange, which was then worth £1.8 million as a going concern. Accordingly on the basis of the Lord Ordinary's own findings in fact, it is my opinion that he erred in reaching the conclusion set out in paragraph  of his opinion, namely that the sale from LGDC to NSL was "made for adequate consideration and was not a gratuitous alienation".
the Lord Ordinary failed to recognise, or at least to articulate, one
inference arising from the evidence
 As already stated in paragraph  above, I consider that the standard security should not be assessed in isolation: rather the whole circumstances including the purchase of Letham Grange by LGDC in 1994, the sale of Letham Grange to NSL in 2001, and the circumstances surrounding the 2003 standard security, should be taken into account. It is the liquidator's contention that, taking the whole circumstances into account, one inference arising from the evidence was that the transactions in 2001 and 2003 were carried out neither in good faith nor for value, with a view to placing the valuable heritable property beyond the reach of the liquidator, thus defeating the claims of LGDC's creditors.
 In this admittedly complex case it seems to me that, while the Lord Ordinary very properly acknowledged that there were unsatisfactory and indeed suspicious events and transactions, and while he recorded matters which he found inexplicable, questionable, difficult to believe, and even "damning" (paragraphs , , , and  of his opinion), he did not take the final step of (i) clearly recognising that there was a significant circumstantial case pointing to a network of transactions entered into with the purpose of keeping Letham Grange (valued at £1.8 million) out of the control of the liquidator, and (ii) explaining why, nevertheless, he was not persuaded that the liquidator should succeed. Rather the Lord Ordinary dismissed or neutralised individual pieces of evidence without, in my view, giving satisfactory reasons for doing so, thus dismantling the component parts of any circumstantial case which was emerging from the evidence, but without first having acknowledged the existence and strength of that circumstantial case, and then explaining why he rejected it.
 Examples of the Lord Ordinary's approach, and the lack of satisfactory supporting reasoning, include the following.
 In paragraph  of his opinion, the Lord Ordinary notes:
"I find the reason for the sale in 2001 to NSL somewhat elusive ... [The explanation that it was agreed to raise the money required for Coquihalla by selling the subjects to NSL is] difficult to believe ... But ultimately this does not matter. The fact is that LGDC did sell the subjects to NSL, whatever might have been the true reasons for that. So the elusiveness of the reasons for the transaction do not impact upon this part of the story ..."
On the contrary, it seems to me that the lack of a sound reason for the sale in 2001 was a highly significant piece of evidence which should have been kept in mind when assessing the overall picture (including credibility), rather than being dismissed at an early stage as unimportant.
 Another example of the neutralising of a piece of evidence is the Lord Ordinary's suggested explanation for the fact that the initial Liu family claims in the sheriff court liquidation proceedings had not been discounted to reflect any undertaking by NSL to repay £1.85 million of Liu family loan. The Lord Ordinary makes the following suggestion at paragraph :
"... It seems to me to be perfectly possible that Mr Liu, in instructing his lawyers in that case, did not at that moment put two and two together so as to realise that the assumption of £1.85 million of the loan by NSL had the effect of reducing the debt due by LGDC to the family members ..."
Mr Liu himself had made no such suggestion: see paragraph  of the Lord Ordinary's opinion, in which Mr Liu is noted as blaming Brodies for having made a mistake by failing to take NSL's undertaking of liability into account. (The Lord Ordinary did not in fact make any finding that Brodies had been to blame.) In my view, it is significant that Mr Liu, (categorised by the Lord Ordinary as an astute businessman), failed to discount the Liu family claims to reflect an assumption of debt which was said to form part of the price for Letham Grange. I agree with counsel for the liquidator that this strand of evidence was important, and tended to suggest that the consideration given for Letham Grange had indeed been £248,100.
 A third example of the dismissal of a significant piece of evidence relates to the remarkable changes in Mr Liu's evidence when explaining whether or not he had told Mr Gardner that the consideration in the disposition was not merely £248,100, but was £248,100 plus £1.85 million (see paragraph  above). First, the Lord Ordinary did not expressly refer to these changes in evidence, but simply noted in paragraph  that:
"Mr Liu did not ultimately assert that he told Mr Gardner the amount of the loans assumed (or to be assumed) by NSL, or even that the loans had been assumed by NSL. His case was that he told Mr Gardner, before the transaction was concluded, that if the cash price was not sufficient he would have NSL assume liability for part of the Liu family loans to LGDC ..."
Secondly, in attempting to resolve the discrepancies between Mr Gardner's evidence and Mr Liu's evidence, the Lord Ordinary stated at paragraph :
"... Mr Gardner was an honest witness. But I was conscious that at this stage in his cross-examination he appeared guarded in the answers that he gave. He had certified that the transaction was for a value of £248,100 and that that was not part of a larger consideration. If he had been told of the additional consideration, he was sure that he would not have done this. I accept that evidence as having been honestly given. Having heard the evidence I consider that it is quite possible, however, that he was told something which, with hindsight he should have understood as a reference to an assumption of liability for the loans. I sensed that he felt his professional integrity to be under challenge. His reason told him that he had not been told of the assumption of debt. But I noted that, when asked in cross-examination whether Mr Liu might have said something to the effect of 'I take that on board, I will deal with it', he replied 'No' but then added that there had been some discussion about loans, though he could not remember when, or in what context. This was when he described it as 'just one of the many loose ends' or words to that effect. I cannot think of any context in which the loans could have arisen for discussion at around this time other than in relation to Mr Gardner having warned Mr Liu that the consideration of £248,100 seemed rather low. Doing my best to make sense of the evidence, I conclude that Mr Liu did take on board the point made by Mr Gardner about the susceptibility of the transaction to challenge if the price was only £248,100, and did tell him that he would deal with it by arranging for an assumption by NSL of part of the family loan."
The point here is that Mr Liu's ultimate position was that he deliberately did not tell Mr Gardner about the enhanced consideration: see paragraph  above. The Lord Ordinary's approach would appear not to take that into account.
 A fourth example of the dismissal of significant evidence is the Lord Ordinary's treatment of the discrepancy between Mr Liu's fax of 23 February 1995 attributing the loan of £1.892 million to eight lenders, and the December 1994 loan letters (first seen in 2003) attributing the loan to four lenders and to assistance from Coquihalla. Although acknowledging that the December 1994 loan letters may not have been written on the dates they bore (see paragraphs  and  of his opinion), the Lord Ordinary did not draw three obvious inferences, namely (i) that these letters did not exist in 1994-1995 when Mr Gardner asked in vain for details of any written agreements in respect of the loans (Mr Gardner certainly never saw them: paragraph 7 of his affidavit dated 22 March 2010); (ii) that these letters did not exist in late 2002 when the liquidator checked through the records and papers of LGDC and found no document relating to Liu family loans in 1994; and (iii) that the letters had been compiled by Mr Liu in 2003 for his own purposes. The Lord Ordinary chose in effect to dismiss the potentially significant discrepancy by indicating in paragraph  of his opinion that:
"... the money being lent was all 'Liu family' money, the precise attribution of which was a matter of relative indifference, certainly to Mr Liu, as were the precise terms as to repayment and interest ..."
My understanding of the evidence suggests that there was no basis for making the assumption that the money lent was all "Liu family" money, let alone attributing such an attitude of indifference to Mr Liu. Again therefore the effect of the Lord Ordinary's approach was to undermine an otherwise apparently significant strand of evidence. Further, the Lord Ordinary neutralised any significance which might have been attached to the delayed appearance in 2003 of the December 1994 letters by his reasoning in paragraph  of his opinion:
"... I am not persuaded that the split between the [Liu] family members was necessarily decided upon by the time of the transaction (it will be recalled that different splits and, indeed, different lenders were mentioned at various times) and it may, therefore, be that the letters of 5 and 8 December 1994 were written and signed some time later. But nothing turns on this. The loans were made to LGDC and were enforceable according to the terms of the letters - the fact that letters are back-dated does not invalidate them in so far as they purport to be a record of the transaction."
In my view, something may well turn on the late production in 2003 of the December 1994 loan letters when the delayed production and the discrepancy between their terms and the terms of Mr Liu's fax of 23 February 1995 are viewed as parts of the whole picture.
 A fifth example of the neutralising of a potentially significant strand of evidence can be found in the Lord Ordinary's brief reference to Mr Gardner's evidence about the disposition from LGDC to NSL in February 2001 (paragraph  of the opinion). There he states: "I do not need to set out that part of [Mr Gardner's] evidence verbatim here." I consider, however, that the content of Mr Gardner's evidence relating to the 2001 disposition was significant and at times startling, painting a picture of a client (Mr Liu) who was not being straightforward in his dealings with his own solicitor. While there might be no need to set out Mr Gardner's evidence verbatim, an indication of the content of his evidence would have presented a more balanced picture.
 Ultimately, having carefully considered the Lord Ordinary's opinion, some of the productions, parts of the transcript, and the submissions made by counsel, I am persuaded that the evidence viewed as a whole does indeed give rise to the inference which counsel for the liquidator contended for (paragraph  above), and that it was an inference which was so significant and important that it was necessary for the Lord Ordinary to acknowledge it, and further to explain why, nevertheless, he could dismiss it. The Lord Ordinary did not do so. The question then arises whether this court should interfere.
this court should interfere
 I am very conscious of the limited role of the appeal court. I wholly accept the strictures set out in Thomas v Thomas 1947 SC (HL) 45, Clarke v Edinburgh and District Tramways Co 1919 SC (HL) 35, Thomson v Kvaerner Govan Ltd 2004 SC (HL) 1, and Hamilton v Allied Domecq plc 2006 SC 221. Nevertheless as Lord Thankerton observed at page 54 of Thomas v Thomas:
"... The appellate court, either because the reasons given by the trial judge are not satisfactory, or because it unmistakeably so appears from the evidence, may be satisfied that he has not taken proper advantage of his having seen and heard the witnesses, and the matter will then become at large for the appellate court ..."
 In the same case at pages 59 to 60, Lord Macmillan explained:
"... the judgment of the trial judge on the facts may be demonstrated on the printed evidence to be affected by material inconsistencies and inaccuracies, or he may be shown to have failed to appreciate the weight or bearing of circumstances admitted or proved, or otherwise to have gone plainly wrong ..."
 This latter passage was referred to by Lord Hope at page 5 of Thomson v Kvaerner Govan Ltd, when he emphasised that the duty of the appellate court, not having the privileges, sometimes broad and sometimes subtle, of the judge who heard and tried the case, was to ask itself whether it was in a position to come to a clear conclusion that the judge who had these privileges was plainly wrong. Nevertheless, as Lord Hamilton pointed out in Hamilton v Allied Domecq plc 2006 SC 221 at paragraph :
... when, on examination by the appellate court of the printed evidence, it is plain that it could not constitute a proper basis for some primary finding of fact made by the judge of first instance, the appellate court has a power and a duty to reverse that finding. If findings of fact are unsupported by the evidence and are critical to the decision of the case, it may be incumbent on the appellant court to reverse the decision made at first instance [italics added] ..."
 In the present case I have found the reasons given by the trial judge to be unsatisfactory in two respects: first, the reasoning given in support of the dismissal of certain important elements of the circumstantial case advanced by the liquidator seems to me inadequate (see paragraphs  to  above); secondly, there is no clear acknowledgment that such a circumstantial case existed and therefore no clear reasoning explaining why such a case might be dismissed. These are not minor issues. Accordingly I consider that the tests set out in Thomas, Thomson and Hamilton are met, and that the matter is at large for this appellate court.
 A key feature of circumstantial evidence is that various strands of evidence, viewed individually, appear to mean nothing: but viewed together, they point to a particular conclusion - in this case, that deliberate steps were taken by various companies (with Mr Liu as their controlling mind) to place a valuable asset of LGDC out of reach of the liquidator of LGDC. At the outset, I reiterate that LGDC, NSL, and Foxworth each knew about each other's affairs, including their financial affairs: see paragraph  above. Thus when assessing questions of good faith for the purposes of the proviso to section 242(4) of the Insolvency Act 1986, it must be remembered that each company had such full knowledge. Further, it is helpful to have regard to the whole history of events, even although some issues have already been determined - for example, by the decree in absence granted on 6 January 2009, and by my conclusion in relation to the 2001 disposition set out in paragraphs  to  above.
 In my opinion, there was no good reason for the sale in 2001 of Letham Grange, then worth £1.8 million. I consider that it is wholly incredible that a company should voluntarily choose to settle an alleged demand for payment of £200,000 with interest (in total about £248,000) by selling its entire business and heritable estate worth £1.8 million comprising 283 acres with a hotel, two golf courses, and a curling rink. As the Lord Ordinary pointed out in paragraph  of his opinion, a loan could have been arranged, with or without assistance from accountants. Alternatively a part (or parts) of the company's assets could have been sold. To choose to sell the whole business and estate for £248,100 (about 13% of its true value) was unjustifiable and inexplicable - unless of course the company wished to denude itself of its valuable assets before being caught up in receivership or liquidation.
 There are further reasons for rejecting the explanation given by Mr Liu for the sale in 2001 (set out in paragraph  above). Although Mr Liu maintained that the whole series of transactions was triggered by a demand from Sanwa Bank regarding repayment of £200,000 and interest, no evidence of such a demand appears to have been led in the proof (other than Mr Liu's evidence). Nor does it appear that there was any proof that a sum of about £248,000 was remitted to Sanwa Bank. The Lord Ordinary certainly made no findings in fact that Sanwa Bank made a demand, nor that they received £248,000. He simply narrated Mr Liu's evidence (paragraph  of his opinion). Coquihalla's alleged role as a lender or guarantor was not in fact mentioned either in 1994-95 (when Letham Grange was purchased and when Mr Gardner's inquiry about the source of the £1.892 million was met with information about eight lenders: paragraph  above) or in 2001 (when Mr Gardner was instructed to prepare the disposition in favour of NSL). Mr Gardner's affidavit and evidence in court made it clear that he had not heard of Coquihalla's alleged role as lender or guarantor in relation to part of the £1.892 million he received in 1994. On the evidence, it appears that the explanation about Coquihalla's role came in 2003 in the sheriff court liquidation proceedings when the December 1994 loan letters were produced. Coquihalla's role was also mentioned by Mr Liu in his evidence in the present action. But there was a marked lack of contemporaneous references to Coquihalla as a lender or guarantor in relation to part of the £1.892 during 1994-95 and 2001-02. Thus there is, in my opinion, at least a question whether the role of Coquihalla and the related loan letter dated 8 December 1994 were created by Mr Liu in or about 2003 for his own purposes.
 These circumstances are in themselves indicative of a gratuitous alienation with a lack of good faith or value, contrary to the terms of the proviso to section 242(2) of the Insolvency Act 1986. But subsequent events enhance that view. What occurred after the appointment of the liquidator on 15 November 2002 was a series of steps, carried out by Mr Liu and by his limited companies, the purpose of which was, in my opinion, to create a network of transactions which disguised the gratuitous alienation and which also introduced a further heritable interest in the property which the liquidator would have to deal with. I refer in particular to the following.
 Explanations that there had been no undervalue for the sale: On 11 February 2003, as soon as there had been intimation of an intention to challenge the disposition as a gratuitous alienation, the liquidator was contacted by Mr Liu's insolvency practitioner based in Manchester (paragraph  above) who maintained that the price had included an additional element of £1.85 million (hitherto unknown either to the conveyancing solicitor Mr Gardner or to the liquidator). That position was maintained despite all the objective evidence pointing to a price of £248,100, such as the conveyancing solicitor's lack of awareness of any greater price; the formal clause in the disposition; the stamp duty paid; and the lack of any trace in LGDC's papers of such an additional consideration.
 The adjustment of the Liu family claims in the liquidation: In June 2003, the Liu family claims in the liquidation had to be adjusted and reduced to take account of the claimed element of £1.85 million contained in the price for Letham Grange. In my view that suggests a slip in keeping up the pretence entered into, namely that the consideration given by NSL for Letham Grange was greater than £248,100.
 The late production of the December 1994 loan letters: In 2003, loan letters dated December 1994 were produced for the first time, purporting to vouch the Liu family loan (liability for part of which was said to have been assumed by NSL, thus enhancing the price from £248,100 by £1.85 million). As these letters had not been produced to the conveyancing solicitor in 1995, despite his specific request, and as nothing resembling them had been found in the papers of LGDC by the liquidator on his taking up office in November 2002, I conclude that they were compiled at some time later than 2002, the precise time being unknown, again for the purpose of the pretence entered into.
 Evidence from Liu family members: Mr Liu's wife (living in Massachusetts, USA) and Mr Liu's parents gave evidence by affidavit and video-link [appendix volume 7]. In my opinion, these witnesses showed little knowledge of the affairs of LGDC, NSL and Foxworth. I adopt the Lord Ordinary's assessment of their evidence in paragraph  of his opinion:
"... They all accepted ... that they did whatever Mr Liu asked them to do, and had signed earlier affidavits (which they sought to adopt in their evidence) essentially at his request because they trusted him - none of them was able to add any detail to their bare statements so as to persuade me that they had any independent recollection of events which I should take into account in coming to my conclusions about what happened."
In other words, these witnesses did not, in my view, prove to be a useful source of information independent of Mr Liu.
 The circumstances and the timing of the creation of the standard security: It was only in 2003, after the appointment of the liquidator to LGDC in November 2002, and when the threat of reduction of the 2001 disposition was looming, that the standard security over Letham Grange (currently challenged in this action) was created by Mr Liu. Many features of that standard security suggest that it was a device to protect Letham Grange from the liquidator. First, for the reasons given by the Lord Ordinary and quoted in paragraph  above, Foxworth knew of the susceptibility of the 2001 disposition to challenge. Secondly, there was no proof - other than Mr Liu's evidence or documents emanating from him - that £300,000 ever passed from Foxworth to NSL. Thirdly, the alleged loan was supposed to have taken place in 2001, yet (for the reasons given by Mr Liu) the standard security ultimately presented to the Land Register was not created until 2003. Fourthly, if NSL, which had no assets, failed to pay Foxworth, the effect of the standard security would be that even if the 2001 disposition were to be reduced as a gratuitous alienation, the standard security could be enforced so that Letham Grange came into Foxworth's (and thus Mr Liu's) ownership and control, rather than into the liquidator's. Fifthly, it was not until the disposition had in fact been reduced on 6 January 2009 that the liquidator was told about the standard security. Sixthly, it was not until Mr Liu lodged his witness statement in the current proceedings that it was made clear that he maintained that Foxworth had (i) lent NSL £300,000 in 2001, and (ii) at some stage undertaken (for no particular reason) liability to repay £1.7 million of Liu family loan. In my opinion, all of the factors referred to above point to the creation of the standard security as a fall-back protection should the 2001 disposition be reduced. The standard security was not therefore granted or received in good faith or for value.
 The payment of additional stamp duty in 2007: When assessing good faith, it is of relevance that a period of about six years passed before additional stamp duty was paid in 2007 in respect of the 2001 disposition: paragraph  above.
 In the result, even if I am wrong in attributing error in law to the Lord Ordinary, it is my opinion that on no view of the evidence has either good faith or value been demonstrated on the part of NSL or Foxworth in relation to the 2001 disposition and the 2003 standard security such as to satisfy the terms of section 242(2) of the Insolvency Act 1986. On the contrary, I have formed the view that NSL, in full knowledge of LGDC's financial difficulties, purchased LGDC's major asset at a significant undervalue, in order to remove Letham Grange from any risk of being taken over by a liquidator. Further, I have formed the view that Foxworth, in full knowledge of the susceptibility of the 2001 disposition to challenge as a gratuitous alienation, took a standard security over Letham Grange, which standard security could be called up, the heritable property taken in satisfaction therefor, and again Letham Grange removed from the liquidator's control.
 I should add that it is possible that the Lord Ordinary was influenced to some extent by his understanding that the original £2 million which was paid for Letham Grange in 1994 was said to be Liu family money. Nevertheless such a consideration, if well-founded (and on the state of the evidence I reserve my opinion on that matter) does not affect the need to recognise the strong circumstantial case referred to in this opinion.
 For all the reasons given in this Opinion, I propose that we allow the reclaiming motion, recall the interlocutor of the Lord Ordinary dated 12 April 2011, sustain the liquidator's second plea-in-law, and grant decree of reduction of the standard security in terms of the second conclusion of the summons.
 It follows that the interlocutor of 17 June 2011 awarding expenses against the liquidator must be recalled. It is therefore unnecessary to address the arguments presented in the cross-appeal.
 The expenses of or relating to the reclaiming motion are reserved to enable parties to address the court on that matter.
EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
 CSIH 13
OPINION OF LORD MENZIES
in the cause
MATTHEW PURDON HENDERSON
(Liquidator of Letham Grange Development Company Limited)
Pursuer and Reclaimer;
(FIRST) FOXWORTH INVESTMENTS LIMITED
(SECOND) 3052775 NOVA SCOTIA LIMITED
Defenders and Respondents:
Pursuer and Reclaimer: Lord Davidson of Glen Clova QC, D Thomson;
Burness Paull & Williamson
First and Second Defenders and Respondents: Sandison QC; Halliday Campbell
1 March 2013
 I am in complete agreement with the reasons given by your Ladyship in the chair, and confirm that this reclaiming motion should be disposed of as you propose.
EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
 CSIH 13
OPINION OF LORD MARNOCH
in the cause
MATTHEW PURDON HENDERSON
(Liquidator of Letham Grange Development Company Limited)
Pursuer and Reclaimer;
(FIRST) FOXWORTH INVESTMENTS LIMITED
(SECOND) 3052775 NOVA SCOTIA LIMITED
Defenders and Respondents:
Pursuer and Reclaimer: Lord Davidson of Glen Clova QC, D Thomson;
Burness Paull & Williamson
First and Second Defenders and Respondents: Sandison QC; Halliday Campbell
1 March 2013
 In my opinion for the reasons given by your Ladyship in the chair at paras  -  supra the Lord Ordinary misdirected himself in thinking that the findings in fact at para  of his Opinion justified his conclusion at para  that "consideration" had been given for the granting of the disposition by LGDC to NSL on 12 February 2001. The disposition was thus reducible as a gratuitous alienation and, for the reasons set out by the Lord Ordinary at paras  -  of his Opinion, that was sufficient to invalidate the Standard Security in favour of Foxworth. On that ground alone this reclaiming motion should be granted.
 If, however, I am mistaken about that and it is necessary to review the Lord Ordinary's handling of the evidence then, for all the reasons given by your Ladyship, I respectfully agree that in this case the Lord Ordinary's findings cannot be supported and that, to the contrary, it is possible for this court to make the substantive finding that the various transactions surrounding Letham Grange were intended to defeat the claims of lawful creditors. That said, it is, in my opinion, sufficient for the reclaimer that the respondents have on no view discharged what, at para  of his Opinion, the Lord Ordinary described as the evidential onus upon them in regard to the alleged loans totalling £1.85 million. Whichever approach is taken the result is, of course, the same and the reclaiming motion should accordingly be disposed of as proposed by your Ladyship.